 How do unisex rating regulations affect gender differences in insurance premiums?Vijay Aseervatham, Christoph Lex and Martin Spindler No 201416, MEA discussion paper series from Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy Abstract: As of December 21, 2012, the use of gender as an insurance rating category was prohibited. Any remaining pricing disparities between men and women will now be traced back to the reasonable pricing of characteristics that happen to differ between the groups or to the pricing of characteristics that differ between sexes in a way that proxies for gender. Using data from an automobile insurer, we analyze how the standard industry approach to simply omit gender from the pricing formula, which allows for proxy effects, differs from the benchmark for what prices would look like if direct gender effects are removed and other variables do not adjust as proxies. We find that the standard industry approach will likely be influenced by proxy effects for young and old drivers. Our method can simply be applied to almost any setting where a regulator is considering a uniform-pricing reform. JEL-codes: C20 G22 K20 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:mea:meawpa:201416 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in MEA discussion paper series from Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy, Amalienstraße 33, 80799 München, Germany. |
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